Treasurer Jim Chalmers’ rejects Queensland’s GST plea

Jim Chalmers has rejected pleas by the Queensland government to increase its share of the GST pie.

Treasurer Jim Chalmers in Brisbane on Monday. Picture: NewsWire / Glenn Campbell

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Jim Chalmers has rejected pleas by the Queensland government to increase its share of the GST pie, saying the state has already “done really well” from federal Labor ahead of the expected May election.

The Treasurer said he would support recommendations from the independent Commonwealth Grants Commission that would see Queensland become the only state or territory to have its allotment of the national GST pot slashed by $2.3bn this financial year, accruing to $5bn by 2028, on the back of bumper coal royalties.

“Queensland were clearly expecting a reduction, they had booked part of this downgrade in their mid-year upgrade. They explicitly said at the time there were further downside risks,” Dr Chalmers said in Brisbane.

“It’s not unusual for state treasurers to want more money from the commonwealth. It is not unprecedented for state treasurers to try and blame commonwealth treasurers for pressures on their own budgets. That story is as old as Federation.”

Queensland Treasurer David Janetzki said the decision penalised the state for its strong performing mining sector.

“Queensland deserves its fair share of GST revenue and Jim Chalmers should not be punishing Queensland because of our strong resources industry and rewarding southern states for their poor policy decisions,” Mr Janetzki said.

“The former Labor government left Queensland with significant fiscal challenges and an outlook downgrade, and the federal Treasurer needs to keep that in mind when he decides what is a fair deal for his state.”

The state’s mid-year economic review did forecast a drop in its GST share, however, only ­accounted for a $1.1bn decline in the next three years.

Dr Chalmers also noted that Queensland had “done really well” under the Albanese government, pointing to its $7.2bn funding pledge to make overdue upgrades to the Bruce Highway.

“The state government should not be blaming the commonwealth government. We’ve all got pressures on our budget,” he added. “Nothing that the commonwealth government is deciding is putting extra pressure on the Queensland budget.”

The share of GST each state and territory receives is calculated by assessing each jurisdiction’s revenue-raising ability and spending needs in an equation that accounts for a range of inputs, including age and wealth demographics, decentralisation, population, and demand on public services.

In 2018, the West Australian government struck a deal with then treasurer Scott Morrison under the Turnbull government that ensured the resource-rich state would receive a minimum of 70c per person after its share fell on the back of soaring commodity royalties. That floor rose to 75c this financial year.

As a result, the federal government agreed to compensate the other states to ensure they were “no worse off” as a result of the deal.

Political scientist Paul Williams said Queensland was no longer the state that would decide the outcome of the federal election, but the reaction of the state Liberal National government could affect voter perceptions of Labor.

“It adds to the perception that Labor is not servicing Queensland, and that will turn some votes … but it probably won’t be enough to turn seats, because there’s no real low-hanging fruit on the Labor tree anymore,” he said.

The associate professor at Griffith University added that Mr Janetzki should be doing more to advocate for a greater share of GST, but said there was a lack of boldness from the David Crisafulli-led government, which was elected in October.